Mayor Michael R. Bloomberg and Deputy Mayor for Health and Human Services Linda Gibbs today announced the preliminary results of the Opportunity NYC-Family Rewards Program which provides cash incentives for low income families that make efforts to improve children’s educational achievement, family health and parents’ employment. In its first two years, the Opportunity NYC Conditional Cash Transfer (CCT) initiative has reduced poverty by 11 percentage points, and improved a number of health and education outcomes. Joining the Mayor and Deputy Mayor Gibbs to discuss the results were Dennis M. Walcott, Deputy Mayor for Education and Community Development; Veronica M. White, Executive Director of the NYC Center for Economic Opportunity; Jonathan Mintz, Commissioner of the New York City Department of Consumer Affairs; Gordon L. Berlin, President of MDRC, the non-profit research organization evaluating the program; Barbara Dwyer Gunn, President and CEO of Seedco, the program’s implementer; and Carolyn McLaughlin, Executive Director of BronxWorks and the host of today’s announcement, one of six neighborhood partner organizations working with Seedco to implement the program. The Mayor was also joined by a program participant, Marilexis Guillen, and her family.

“To tackle an entrenched social problem like poverty, you have to try new approaches. And that is exactly what we did,” said Mayor Bloomberg. “When we launched this pilot program, we knew conditional cash transfer programs were effective in other countries, and now we know certain aspects of the program can work here in New York. As a result of our work, we now have a better understanding of what government can do to improve people’s lives and stop the cycle of poverty in our communities.”

“Can you imagine the challenge for a family to set long term financial goals when they don’t have enough money to get through the week,” asked Deputy Mayor Gibbs. “The Opportunity NYC-Family Rewards program enabled us to make it worthwhile for families to change their lifestyles to make investments in their futures. As the program completes its third year, we will continue to look at what worked and where additional improvements may be needed for future programs like this. We will also share our findings with other municipalities interested in starting CCT programs.”

Opportunity NYC–Family Rewards was launched by New York City’s Center for Economic Opportunity in 2007 as an experimental, privately funded CCT program to help families in six of the city’s highest-poverty communities break the cycle of intergenerational poverty. Unlike conventional approaches to poverty reduction, which focus on social services, Family Rewards offers cash assistance to reduce immediate hardship and poverty to families that make efforts to improve children’s educational achievement, family health and parents’ employment.

“The NYC Center for Economic Opportunity is dedicated to identifying and testing innovative approaches to reduce poverty,” said Veronica White, Executive Director of the NYC Center for Economic Opportunity. “The Opportunity NYC program is a terrific example of how CEO develops partnerships with multiple agencies and organizations to pursue a rigorous research agenda – one that will certainly inform future anti-poverty programs in New York City and beyond.”

Toward Reduced Poverty Across Generations: Early Findings from New York City’s Conditional Cash Transfer Program is the first comprehensive report of initial findings from an on-going evaluation. The effects on poverty reduction and other economic outcomes were substantial. Family Rewards disbursed more than $14 million to 2,400 families during the program’s first two years. Payments averaged about $3,000 a year with families’ overall reward earnings coming largely from meeting education and health targets. This program made it easier for participants to make ends meet and pay for basic necessities, including food, phone service and utilities. It also decreased the use of costly financial institutions, like check-cashing establishments. Family Rewards reduced the number of families living in poverty by 11 percentage points, and increased the likelihood that parents would have bank accounts by 22 percentage points.

“Now more than ever, having at least a high school education is a requirement to make it in the workforce,” said Deputy Mayor Walcott. “Several of the Family Rewards incentives were designed to encourage education and achievement for both students and parents. While the program was most successful for high school students, many New York families did benefit from improved educational achievement -- including some parents who are now furthering their own education so that they can one day get better jobs.”

“The Opportunity NYC program helped us improve our lives,” Merilexis Guillen said. “Since we started the program, we have had regular physicals and check ups. I’ve been attending more parent-teacher conferences, and now I know what I can do to help my children do better in school. They’re doing better on tests and their attendance has gone up.Opportunity NYC also helped me better myself. I’ve gone back to school and have two semesters left before I receive my degree.”

In addition, Family Rewards showed modest early progress in education, health and employment for some program recipients.

For high school students who had met basic academic
proficiency standards before entering high school, Family Rewards increased
school attendance, course credits, grade advancement and standardized test
results.

Small increases in jobs that are not covered by the unemployment insurance (UI) system (such as domestic workers, federal government employees, and the self-employed), while decreasing employment in UI-covered jobs.

The program did not have an impact in improving school outcomes for elementary or middle school students, or for high school students who had not met basic academic proficiency standards before entering high school.

“These early results from Family Rewards are encouraging, given the broad variety of effects it produced,” said James Riccio, Director of the Family Rewards evaluation and lead author of the report. “We look forward to following these families for another three years to see whether these effects will grow over time.”

“Seedco’s successful launch of this innovative anti-poverty initiative together with our community partners allows for a fair test of financial incentives and the conditional cash transfer model in New York City,” said Barbara Dwyer Gunn, President and CEO of Seedco. “We are gratified by the particularly high level of family engagement described in MDRC’s report, which reflects the high need during these economic times, as well as the hard work Seedco and its partners have done to help families understand the incentives offered and the resources and support services available in their communities.”

MDRC’s evaluation relied upon a randomized control trial involving approximately 4,800 families and 11,000 children – half of whom were eligible for program incentives. The other half served as a control group for comparison purposes. This evaluation is the first in a series to be conducted on this program. MDRC will continue to follow the families involved for an additional two years after the program concludes and incentives are no longer available.A series of evaluation reports will be released between now and 2013.

The Family Rewards program is one of 40 initiatives sponsored by the Mayor’s Center for Economic Opportunity—an organization responsible for testing innovative strategies to reduce the number of New Yorkers living in poverty. Family Rewards is currently in its third and final year (September 2009-August 2010). As the evaluation process continues, Opportunity NYC will review results from the pilot program and may work with other municipalities to implement similar programs.

The Opportunity NYC program is privately funded by donations made to the Mayor’s Fund to Advance New York City. Major contributors include Bloomberg Philanthropies, The Rockefeller Foundation, the Starr Foundation, the Open Society Institute, the Robin Hood Foundation, the Tiger Foundation, The Annie E. Casey Foundation, American International Group (AIG), the John D. and Catherine T. MacArthur Foundation, and New York Community Trust.

“For almost 100 years the Rockefeller Foundation has been committed to funding new and innovative programs that help poor and vulnerable people in the US and around the world,” said Dr. Judith Rodin, President of the Rockefeller Foundation. “The Foundation has been proud to partner with MDRC and the City of New York and to fund the Opportunity NYC program, a unique poverty-fighting model from Latin America that is the first of its kind in the United States. This first report from MDRC shows that the program is already having an impact, and we look forward to learning more as the medium- and longer-term results of the program become available to determine if this project is one that produces results that can be ultimately be replicated around the world.”

The Center for Economic Opportunity

The Center for Economic Opportunity was established by Mayor Bloomberg in 2006 to implement innovative ways to reduce poverty in New York City. Led by Executive Director Veronica M. White and supported by a combination of public and private funds, the Center for Economic Opportunity works with City agencies to design and implement evidence-based initiatives aimed at poverty reduction. The Center manages an Innovation Fund through which it provides City agencies annual funding to implement such initiatives and also oversees a rigorous evaluation of each to determine which are successful in demonstrating results towards reducing poverty and increasing self sufficiency among New Yorkers.

The Mayor’s Fund to Advance New York City

The Mayor's Fund to Advance New York City is a 501(c)(3) not-for-profit organization which supports innovative public-private partnerships such as Opportunity NYC. The Fund relies on individuals, foundations and corporations to support public programs serving New Yorkers throughout the five boroughs in areas including the environment, youth development, financial empowerment, health, volunteerism and the arts.

MDRC

Created in 1974 by the Ford Foundation and a group of federal agencies, MDRC is best known for mounting large-scale evaluations of real-world policies and programs targeted to low-income people. MDRC is dedicated to learning what works to improve the well-being of low-income people. Through its research and the active communication of their findings, MDRC seeks to enhance the effectiveness of education and social policies and programs.

Seedco

Seedco is a national intermediary that helps community-based organizations implement large-scale and high-impact initiatives that help low-income people and communities move toward economic stability. Leveraging its partnership networks and operating infrastructure, Seedco is responding to the economic crisis for workers, small businesses and communities through its Economic Recovery Initiative.